EVgo Receives Conditional Commitment for DOE Loan Guarantee of up to $1.05B

EVgo Inc., one of the largest public fast-charging networks in the U.S. for electric vehicles (EVs), announced a significant milestone by securing a conditional commitment for a loan guarantee of up to $1.05 billion in debt financing from the U.S. Department of Energy (DOE) Loan Programs Office (LPO). This financing, awarded under the DOE’s Title 17 program, is intended to support EVgo’s efforts to accelerate the expansion of its fast charging network, particularly in underserved community locations across the country.

The Title 17 program provides loan guarantees to projects that reduce greenhouse gas emissions and utilize innovative technologies, making EVgo’s initiative a fitting candidate. This expansion will contribute to the ongoing effort to reduce range anxiety and support broader EV adoption in the U.S., in line with government initiatives to promote clean energy and reduce the nation’s carbon footprint.

The loan commitment from the DOE underscores the federal government’s support for expanding EV infrastructure to meet the needs of a rapidly transforming automotive landscape, as more manufacturers and consumers shift toward electric transportation. It was the first financial support for an EV charger company from the LPO and comes from the office’s innovative clean energy program, which has about another $70 billion of loan authority.

“The key is helping the company really achieve far higher customer service scores, (which) will mean that more people want to charge there, and it’ll mean that they’ll be able to pay back our loan faster,” said Jigar Shah, Director of DOE’s Loans Programs Office. EVgo, which is not yet profitable, currently has over 3,500 fast charging stalls.

EVgo’s planned network expansion, facilitated by the $1.05 billion conditional loan guarantee from the U.S. Department of Energy, will strategically complement the National Electric Vehicle Infrastructure (NEVI) Formula Program. While NEVI focuses on establishing charging corridors along major highways, EVgo’s expansion will target localized, community-based fast charging stations. This will provide much-needed infrastructure for EV owners who rely primarily on public charging, particularly those living in multifamily housing without access to home chargers.

The initiative aligns with the Biden-Harris administration’s Justice40 initiative, which aims to ensure that 40% of the benefits from federal investments go to marginalized and underserved communities. Accordingly, over 40% of the new EVgo charging stalls will be located in areas that have been disproportionately affected by environmental degradation. This focus on equitable access will help bring EV infrastructure to communities that might otherwise be overlooked, expanding charging opportunities in both urban and rural areas.

“EVgo shares the Biden-Harris administration’s goal of increasing EV charging access in the communities that need it most,” said Badar Khan, CEO at EVgo. “This historic investment would meaningfully accelerate our network expansion to provide public charging to EV drivers across the United States.”

The proposed $1.05 billion financing for EVgo, structured as a limited recourse project financing, will be provided by the Federal Financing Bank with a U.S. Department of Energy (DOE) loan guarantee. This setup offers EVgo a key advantage: it won’t require third-party equity, whether public or private, to reach financial close or to begin drawing down funds. This flexibility allows EVgo to scale its fast charging network, both within and outside of the financed project, further supporting the Biden-Harris administration’s initiative to establish a nationwide public EV charging network.

The project is also expected to generate substantial employment, with more than 1,000 jobs created during the buildout. Over 700 of these will be contracted roles, including positions in construction, engineering, development, and operations and maintenance, contributing to local economies while accelerating EV infrastructure deployment.

EVgo’s experience in public-private partnerships positions it well to leverage additional funding opportunities and collaborate with utilities, state agencies, and retail site hosts. The company’s decade-long track record in expanding EV charging accessibility, along with its strategic partnerships, makes it a key player in the broader push for electric vehicle adoption.

A significant focus of the collaboration between EVgo and the DOE is ensuring a superior customer experience for EV drivers. Together, they aim to develop long-term solutions to improve charging convenience, reliability, and overall consumer confidence. To support this, EVgo plans to roll out next-generation charging infrastructure starting in the second half of 2026.

While this conditional loan commitment from the DOE is a significant milestone, certain technical, legal, environmental, and financial conditions must be met before the financing is finalized. If successful, this partnership will not only support EVgo’s expansion but also play a crucial role in the larger national effort to promote clean energy and EV adoption across the U.S.

EVgo Profitability Remains Elusive

EV charging is October 2024 remains unprofitable in many cases. Investors make the move into EV charging expecting to make profits in the future. Because the US is still in early adoption mode for electric vehicles, profitability hasn’t come for many companies, including EVgo. But as the EV revolution grows, more profit will come for all involved, include charge point operators and EV charging companies.

Seeking Alpha reported on EVgo’s profits in August 2024. In the second quarter of 2024, EVgo expanded its charging network to a total capacity of 66 GWh, marking a significant 164% year-over-year growth compared to 24 GWh in the previous year’s Q2. This substantial increase is largely due to the addition of 131,000 new customer accounts during the quarter.

EVgo surpassed analysts’ expectations, with Q2 earnings per share (EPS) exceeding estimates by 12%. The company is on a positive growth trajectory, with an average annual growth forecast of 26% over the next three years. However, despite this progress, EVgo reported a net loss of $29.6 million, a 49% increase from Q2 2023. The company’s adjusted EBITDA also remained negative at US$ 8.0 million, leading to a loss of US$ 0.098 per share—an increase from the previous year’s Q2 loss of US$ 0.082 per share.

EV Charging Stations are Becoming More Profitable

For companies such as EVgo and charge point operators (CPOs) that own and manage the charging stations, profitability is finally coming, thanks to increased utilization. The rise in utilization of U.S. fast-charging stations, excluding those operated by Tesla, marks a significant milestone in the growing adoption of electric vehicles (EVs). According to new data from Stable Auto Corp., average utilization doubled in 2023, increasing from 9% in January to 18% by December. This means that, by the end of the year, each fast-charging cord was in use for nearly five hours per day, a significant uptick in demand and profitability.

From a business perspective, the jump in utilization is also crucial because, as noted by Stable Auto CEO Rohan Puri, a charging station typically needs to be in use at least 15% of the time to turn a profit. With the national average hitting 18% by the end of 2023, many charging stations are now operating at profitable levels for the first time, signifying that more stations are becoming financially viable.

Stable Auto’s AI-powered site evaluation and network operations solutions offer a cutting-edge approach to optimizing the deployment of EV charging infrastructure. By leveraging data-driven insights, Stable Auto helps businesses and organizations identify the most strategic locations for EV charging stations, ensuring maximum utilization and financial returns.